Japan’s ministry of internal affairs and communications has charged three telecom operators with penalties for providing excessive discounts on smartphones for customers.
According to a report by Japan Times, NTT Docomo, KDDI, and SoftBank sold smartphones to customers through coupons. Japan’s Ministry has banned such subsidies to curb excessive competition among carriers in handset discounts and the rising cost of mobile fees. The rule for the same was passed in November 2015.
The penalty is such that the three mobile operators should develop and submit measures by the end of the month to the ministry on how to end the practice.
Prior to providing penalties, the three operators were warned about such practices in April 2016. However, the trio continued to provide discounts. According to the Ministry of Internal Affairs and Communications, the subsidies allow buyers to get a 32GB iPhone 7 for free.
The excessive handset subsidies contribute to high mobile tariffs. In Japan, the mobile communications spending has grown to 4.4% of the household budget of an average Japanese family of two or more, a 20% increase over the last 10 years. The Government is trying to reduce this financial burden on the households. The Government has asked the operator to reduce the tariffs and provide customers a wider variety of data plans.
Besides Japan, South Korea has also echoed a similar ban on subsidies in the sale of smartphones in 2014.